KINSHASA/PARIS, Feb 25 (Reuters) - The Paris Club of creditor nations has agreed to write off or reschedule almost half of the $6.9 billion debt owed to it by Democratic Republic of Congo, it said on Thursday.
Of $3 billion covered by Thursday's agreement, $1.3 billion will be cancelled and almost $1.7 billion rescheduled, while debt service payments have been deferred until after July 1, 2012.
The agreement follows the International Monetary Fund's approval in December of a long-awaited $550 million loan arrangement for the DRC, making the country eligible for an IMF debt relief program.
The Club deferred repayments 'on an exceptional basis, considering the Democratic Republic of Congo's limited capacity of payment', it said in a statement.
Paris Club creditors said they would be ready to give further relief once Congo reaches completion point under the Highly Indebted Poor Countries (HIPC) initiative.
'The Democratic Republic of Congo is committed to devote the resources that otherwise would have gone to Paris Club creditors to priority areas identified in the country's poverty reduction strategy paper,' the statement said.
The mineral-rich but politically unstable and economically fragile central African nation's debt to the Paris Club stood at $6.9 billion at the end of June 2009.
The World Bank and the IMF launched HIPC in 1996 to provide a framework in which creditors can provide debt relief to the world's poorest and most heavily indebted countries.
The Paris Club, formed in 1956, is an informal group of creditor governments from large industrialised countries.
(Reporting by Katrina Manson and Sophie Taylor; Editing by Robin Pomeroy and Daniel Magnowski) Keywords: CONGO DEMOCRATIC/DEBT (daniel.magnowski@reuters.com; Dakar Newsroom +221 33 864 5076) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Of $3 billion covered by Thursday's agreement, $1.3 billion will be cancelled and almost $1.7 billion rescheduled, while debt service payments have been deferred until after July 1, 2012.
The agreement follows the International Monetary Fund's approval in December of a long-awaited $550 million loan arrangement for the DRC, making the country eligible for an IMF debt relief program.
The Club deferred repayments 'on an exceptional basis, considering the Democratic Republic of Congo's limited capacity of payment', it said in a statement.
Paris Club creditors said they would be ready to give further relief once Congo reaches completion point under the Highly Indebted Poor Countries (HIPC) initiative.
'The Democratic Republic of Congo is committed to devote the resources that otherwise would have gone to Paris Club creditors to priority areas identified in the country's poverty reduction strategy paper,' the statement said.
The mineral-rich but politically unstable and economically fragile central African nation's debt to the Paris Club stood at $6.9 billion at the end of June 2009.
The World Bank and the IMF launched HIPC in 1996 to provide a framework in which creditors can provide debt relief to the world's poorest and most heavily indebted countries.
The Paris Club, formed in 1956, is an informal group of creditor governments from large industrialised countries.
(Reporting by Katrina Manson and Sophie Taylor; Editing by Robin Pomeroy and Daniel Magnowski) Keywords: CONGO DEMOCRATIC/DEBT (daniel.magnowski@reuters.com; Dakar Newsroom +221 33 864 5076) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2010 AFX News
